Sensex pares most gains, ends 99 points higher; bank stocks bleed

MUMBAI: Index heavyweights such as Reliance Industries (RIL) and Infosys drove Sensex higher on Monday, in sync with the movement in world equities, but the benchmark index closed off day's high following concerns over rising coronavirus cases and its economic implications.

Banking and financial stocks reversed their early gains and limited upside for the benchmark.

“In a volatile day of trade, the market gave up almost all of its early gains, before closing out the day with a positive bias. Markets are hoping for further stimulus measures from the RBI, following expectations of a softening of inflation rates, which would give the central bank room for further rate cuts,” said Vinod Nair, head of research at Geojit Financial Services.

Nair advised investors to be cautious and to look at stock-specific movements with regards to earnings announcements and commentary.

Benchmark Sensex closed 99 points higher at 39,694. It had risen by as much as 430 points earlier in the day to 37,024.20. Peer Nifty climbed 47 points to close at 10,815.


A total of 19 of 30 Sensex stocks closed higher. Oil-to-telecom conglomerate RIL was the top contributor to Sensex’s gains as the stock logged a new high of Rs 1,947 after the company secured a Rs 730 crore from wireless technology leader Qualcomm by selling a small stake in Jio Platforms.

The stock pared some gains and closed 2.97 per cent higher at Rs 1,934.30.

IT major Infosys followed next as it gained 1.91 per cent.

“That frontline indexes were higher at the opening but lost altitude with a sell off in the financials. Banks took a beating and it may be mentioned that the sector has been severely impacted by the lockdown and the moratorium and a rise in NPAs is expected as the moratorium is lifted. Non-food credit also has been slower in growth impacting fresh business," said Joseph Thomas, Head of Research, Emkay Global Financial Services.

Even as frontline indices closed in the positive, the market breadth favoured the bears, with losers beating gainers in the ratio of 1.4:1 on the BSE. While the BSE midcap index rose 0.05 per cent, BSE Smallcap dropped 0.15 per cent.

BSE Energy index was the top sectoral gainer as it advanced 2.47 per cent. BSE Telecom followed next with a 1.93 per cent gain. BSE Realty was the top sectoral loser as it shed 1.52 per cent.

BSE Finance and Bankex reversed early gains and closed 1.49 per cent and 1.39 per cent lower, respectively.

Avenue Supermarts, which owns and operates retail chain DMart, dropped 3.86 per cent after it reported an 87.59 per cent decline in consolidated net profit at Rs 40.08 crore for the June quarter.

Private lender YES Bank continued to slide, falling 13.33 per cent after it launched its follow-on public offer to raise up to Rs 15,000 crore, the floor price of which was fixed at Rs 12 per share last week.

Biocon surged nearly 10 per cent in early trade to hit a fresh 52-week high after the drugmaker said it has received approval for use of its biologic drug Itolizumab to treat moderate to severe Covid-19 patients. The stock pared all gains and closed 0.07 per cent higher.

Foreign institutional investors (FIIs) have been flip-flopping between being net buyers and net sellers of Indian shares in July so far, and have sold a net of $33.54 million or Rs 267.66 crore of Indian stocks so far this month. Domestic institutional investors (DIIs) too have followed a similar pattern and have net sold Rs 655.20 crore of shares in the same period.

Markets at a glance

• Sensex up 0.27% or 99 points to close at 36,694
• Nifty rises 0.44% or 47 points to close at 10,815
• 19 of 30 Sensex stocks close higher
• Top Sensex gainers: TechM up 5.53%, HCL Tech 3.48%, RIL 2.97%
• RIL logs new high of Rs 1,947 on deal with Qualcomm
• RIL makret cap crosses Rs 12.26 lakh crore
• Top Sensex losers: Bajaj Fin 2.41%, HDFC Bank 2.26%, HDFC 2.11%
• Bears in charge; advance-decline ratio at 1:1.4 on BSE
• Broader markets mixed; BSE midcap up 0.05%, smallcap down 0.15%
• BSE Energy top sectoral gainer, up 2.47%
• Aegis Logistics up 3.78%, RIL top gainers in BSE Energy
• BSE Telecom up 1.93%; ITI up 5.74%, Tata Comm 5%
• BSE Realty index top loser, down 1.52%;
• IB Realty down 4.67%, Sunteck Realty 3.27% top BSE Realty losers
• Avenue Supermarts drops 3.86% on disappointing Q1 earnings
• YES Bank continues to slide, tumbles 13.33% on lower FPO floor price
• Biocon ends flat after hitting 52-week high on Covid-19 drug approval

Who moved my market

• Firm world stocks

Asian shares climbed toward five-month peaks on Monday as investors wagered the U.S. earnings season would see most companies beat forecasts given expectations had been lowered so far by coronavirus lockdowns, Reuters reported. European shares rose on Monday, with cyclical sectors leading gains as investors hoped the upcoming earnings season and stimulus talks will feed into an economic recovery from the coronavirus-induced downturn, a Reuters report said. MSCI’s broadest index of Asia-Pacific shares outside Japan added 1 per cent, while The pan-European STOXX index rose 0.5 per cent.

• Continued record surge in coronavirus cases

New coronavirus cases in India continue to rise, and are yet to reach their peak. India added a record 28,701 fresh cases of coronavirus infection on Monday, and the country's COVID-19 tally currently stands at to 8,78,254. The death toll rose to 23,174 with 500 patients succumbing to the disease in a day.

What to watch out for

• The coronavirus cases in India are rising by a record each day and are a major cause of worry.

• The movement of global markets will be closely watched as the domestic market tends to take cues from them.

• Progress on vaccine for Covid-19 treatment will be closely watched.

• The June quarter corporate earnings season has started and it will provide a better picture of the damage caused by the pandemic-induced lockdown. More importantly, the commentary will be key.